A variety of factors are driving growth in manufacturing, warehousing and distribution on a global basis, especially an increase in industrial production in the first half of 2010 despite factory utilization rates that remain very low by historical comparison. “Consumer demand has not returned,” Hal Vandiver, executive vice president of business development for MHIA, told Modern this weekend during the association’s fall meeting. “But in the first two quarters, the economy shifted from recession into recovery mode, filling supply chain pipelines, re-establishing inventories and responding to pent up demand.”

While Vandiver expects the industry to continue to grow by 11% to 12% in 2011, drags on the economy continue.

“Forecasts are now calling for a combination of reduced GDP, corporate profit, business investment and output growth with industrial utilization remaining below 75% until late 2011,” Vandiver said. “This is largely due to uncertainty. Consumers, investors and business owners need greater confidence in the economy’s ability to sustain positive growth.” For those reasons, Vandiver doesn’t expect a significant return to the kinds of numbers the industry posted in the past until 2007.

In addition to a growth in orders for new equipment, Vandiver forecasts material handling shipments to grow 3% to 4% in 2010 and another 10% to 11% in 2011. Domestic demand, defined as shipments plus imports less exports, will grow by 1% in 2010 and by 10% to 11% in 2011. Exports will be stronger than imports in 2010 and 2011, reflecting stronger industrial growth in emerging markets outside North America.

Click here for more articles on how the economy is affecting the industry.

February 21, 2012

About the Author

Bob Trebilcock

Bob Trebilcock, editorial director, has covered materials handling, technology, logistics and supply chain topics for nearly 30 years. In addition to Supply Chain Management Review, he is also Executive Editor of Modern Materials Handling. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484.

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